"US Western Digital Likely to Agree with Elliott on HDD-Flash Business Separation"

[Image source=Reuters Yonhap News]

[Asia Economy Reporter Jeong Hyunjin] According to sources cited by the Wall Street Journal (WSJ) on the 7th (local time), U.S. semiconductor company Western Digital is expected to reach an agreement with activist investor Elliott Management to separate its hard disk drive (HDD) and flash memory businesses.

Earlier, Elliott disclosed that it holds a 6% stake in Western Digital and sent a letter proposing to consider separating the two businesses. Subsequently, David Goeckeler, CEO of Western Digital, stated at a conference at the end of last month that "the letter was very constructive" and that discussions with Elliott on this matter are ongoing.

Sources indicated that details related to this could be disclosed as early as this week, but nothing has been finalized yet.

Western Digital is currently a U.S. semiconductor company with a market capitalization of $19 billion (approximately 23.8 trillion KRW), primarily producing memory semiconductors. In the NAND flash market for the first quarter of this year, it ranked 4th with a 12.5% market share, following Samsung Electronics, Japanese semiconductor company Kioxia, and SK Group.

Meanwhile, sources said that the possibility of a merger between Western Digital and Kioxia still remains. Although there were numerous reports last year about merger discussions between the two companies, these talks have reportedly been at a standstill in recent months. If the two companies merge, they are expected to pose a threat to domestic semiconductor companies in the NAND market. As of the first quarter, the combined market share of Kioxia and Western Digital is 31.4%, which is 3.9 percentage points behind the leader Samsung Electronics.

If the two companies merge, WSJ analyzed that it would be more appropriate for Kioxia to merge with Western Digital’s flash memory business.

This content was produced with the assistance of AI translation services.